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Washington Post, September 4, 2019

Top Interior official who pushed to expand drilling in Alaska to join
oil company there

By Juliet Eilperin and Steven Mufson

Last summer, Scott Pruitt left his job heading the Environmental
Protection Agency and within a few months had started consulting for
coal magnate Joseph W. Craft III. Three weeks after leaving the Interior
Department, energy counselor Vincent DeVito joined Cox Oil Offshore,
which operates in the Gulf of Mexico, as its executive vice president
and general counsel. Now, Joe Balash — who oversaw oil and gas drilling
on federal lands before resigning from Interior on Friday — is joining a
foreign oil company that’s expanding operations on Alaska’s North Slope.

Balash, who had served as the Interior Department’s assistant secretary
for Land and Minerals Management for nearly two years, confirmed in a
phone interview Tuesday night that he will begin working for the Papua
New Guinea-based Oil Search, which is developing one of Alaska’s largest
oil prospects in years.

The company is drilling on state lands that lie nearby — but not inside
— two federal reserves where the Trump administration is pushing to
increase oil and gas development: the Arctic National Wildlife Refuge
and the National Petroleum Reserve-Alaska. During his time at Interior,
Balash oversaw the department’s work to hold lease sales on the coastal
plain of the 19.3 million-acre refuge and to expand drilling on the 22.8
million-acre reserve to the west of the refuge. Both sites are home to
large numbers of migratory birds as well as caribou, polar bears and
other wildlife.

Balash declined to disclose his specific role and said that while he
would oversee employees who would work with the federal government on
energy policy, he would abide by the Trump ethics pledge barring
appointees from lobbying their former agencies for five years.

“I’ll supervise those who do,” he said, referring to Oil Search staffers
with business before the federal government, “but I have a ton of
restrictions dealing with the Department of Interior. Most of Oil
Search’s properties are state lands. There isn’t really the federal nexus.”

Oil Search has been expanding aggressively in Alaska, where it says it
has acquired more than 700 million barrels of crude reserves. In May,
the company received the go-ahead from the Army Corps of Engineers and
it plans to ramp up production operations this year and over the winter.

Balash noted that Interior “was not even a cooperating agency” in the
decision to grant Oil Search the recent permit under the Clean Water Act.

Danielle Brian, executive director of the Project on Government
Oversight, said in an interview that the fact that Balash has been
working to make more land available for exploration near Oil Search’s
ongoing development raises concerns.

“If this ends up being legal, it’s further confirmation to me that our
laws are simply inadequate,” Brian said. “It is hard to have confidence
that decisions he was making while he was working for the taxpayers were
not impacted by his aspirations or hopes to go work for a company that
was materially affected by his work.”

“As a matter of policy, I’m unable to comment on business rumors,” Oil
Search spokeswoman Amy Burnett said in an email.

Balash has extensive experience in Alaska state politics. He served as
the deputy commissioner for Alaska’s Department of Natural Resources and
ran the agency on an acting basis for just over a year, before becoming
chief of staff for Sen. Dan Sullivan (R-Alaska). He joined Interior in
December 2017.

Earlier, Balash served in the governor’s office as a special assistant
on energy and natural resource development. And prior to that, he worked
on the joint legislative budget and audit committee and served as chief
of staff to the state Senate president. Balash also attended high school
in Fairbanks.

Ethics experts said that regardless of the Alaskan’s job description,
his decision to join an oil company raises potential conflict of
interest issues, although part of it would depend on the nature of his
negotiations with the firm before he left public office.

Under 18 U.S. Code Section 208, a federal official is barred “from
participating personally and substantially in a particular Government
matter that will affect his own financial interests, as well as the
financial interests of” his spouse, children and “a person with whom he
is negotiating for or has an arrangement concerning prospective employment.”

“At the point Balash began discussing employment opportunities with Oil
Search, he was prohibited from personally and substantially
participating in any particular matter that would affect Oil Search’s
financial interests,” said Brendan Fischer, federal reform program
director at the Campaign Legal Center.

Oil Search has not bid on federal leases in Alaska, although officials
from the firm met with Balash multiple times while he served as
assistant secretary, according to his public calendar. On Jan. 10, 2018,
he had a meeting classified as a video call with Oil Search executives —
including its Alaska business unit president, Keiran Wulff — described
as a “meet and greet” in his calendar notes.

“Oil Search is slated to be a large player in Alaska Oil development,”
the notes read. “Further, AK is their first play in the USA. Anchorage
is slated to be their North American headquarters.”

On April 17, 2018, Balash had a video call with Wulff. Nearly seven
months later, Balash took part in what his calendar described as an “Oil
Search Presentation/Update.”

This June, both Balash and Wulff appeared as featured speakers during a
membership luncheon of the Resource Development Council in Anchorage.

Established in 1929, Oil Search owns oil production and 29 percent of a
large liquefied natural gas project in Papua New Guinea. Papua New
Guinea is the world’s 11th-largest exporter of liquefied natural gas.
Oil Search and its partner ExxonMobil are planning to substantially
enlarge LNG exports.

The company has also expanded quickly in Alaska. In 2018, it bought oil
assets from two private companies and later exercised $450 million of
options to buy other nearby fields. On May 14, it received Army Corps of
Engineers approval to develop the Nanushuk field in the Pikka Unit,
which is on state- and Native Alaskan-owned land on the North Slope. The
company says the project could eventually produce 120,000 barrels a day.

“Alaska provides us with world class oil assets with significant
upside,” the company said in a report. It also said that it was
“building an independent, highly experienced management team to develop
and operate our Alaskan assets.”

Balash has consistently argued in favor of curbing federal restrictions
on energy development in Alaska, to help boost the state’s economy. In
an interview this summer, Balash said he was committed to working with
Alaska natives on the North Slope to ensure that the region could expand
energy exploration in a way that would improve people’s lives there.

“And so, you know, more than anything, I want to help empower the people
who live there to manage those resources in a cooperative way with the
federal government,” he said.